Four states adopt NMRC’s draft mortgage foreclosure law

Hopes of realizing the mortgage-backed housing dream brightened recently, following the adoption of the Nigeria Mortgage Refinance Company (NMRC) pioneered draft model mortgage foreclosure law by four states in the country.

The states that have executed the law, memorandum of understanding and technical assistance with the mortgage company are Kogi, Cross River, Kaduna and Delta states.

Details of the agreement is still sketchy, but the Association of Housing Corporations of Nigeria (AHCN) are calling on all other state governments to adopt this model for provision of affordable and sustainable housing for their citizens.

The law is expected to fast-track the process for creating legal mortgages (including reducing the cost and the processes for obtaining the relevant consents and registration), timely resolution of disputes arising out of mortgage transactions, consumer protection and creating an efficient foreclosure process.

They also advised the Federal Government to recognise the potentials of state housing corporations in mitigating the huge shortfall in Nigerian housing sector. AHCN lamented that its potentials had over the years been cut short as a result of political interference and called on government to take appropriate steps to strengthen and embrace emerging partnership options for effective delivery of decent and affordable mass housing as well as promote effectiveness and profitability of housing agencies.

The association posited that there are inherent opportunities in business synergies and strategic alliances to reduce cost and expand into new markets in housing provision through effective partnership models with the Federal Mortgage Bank of Nigeria, (FMBN) to enhance wholesale mortgage lending and origination in addressing housing shortfall in Nigeria.

In a communiqué issued at the end of its two-day National Workshop on, “Emerging Partnership Options For Decent And Affordable Mass Housing” held in Imo State, the forum applauded the roles of Nigeria Mortgage Refinance Company in sustainable housing mortgage system and challenged governments to speed up the development of a legal framework for judicial enforcement of mortgages and foreclosure legislations to boost investors’ confidence and streamline bureaucracies in the Nigeria’s mortgage market.

According to AHCN, the current level of underdevelopment of Nigerian Mortgage sector in driving homeownership is worrisome as more than 90per cent of new homes utilise funds from personal savings for incremental construction of which overall mortgages account for less than one per cent of National Gross Domestic Product (GDP) and real estate accounts for just about 8per cent, as opposed to 35per cent and 65per cent respectively in other developing and developed economies of the world.

AHCN therefore resolves to take advantage of the $300 billion World Bank funds for the Nigeria Housing Finance Programme (NHFP) of which only $120 million was drawn by the NMRC to date and calls on all state governments to support their housing agencies to access these funds for provision of housing for their citizens.

To address the issue of non-availability of data base for off-takers on real estate and mortgage information management which constituted major challenge to the development of mortgage system in Nigeria, the Association resolves to kick-start a pilot scheme of Home Ownership Off-takers Affordability Survey Data base from first quarter of 2018 with a creation of a verifiable working database of about 1,000 workers per selected state.

“The initiative is in a partnership with Value Chain Project Consultants, it would pre-qualify AHCN for their actual housing needs and mortgages to acquire same in all the states of the federation. The meeting therefore reiterates its call on the Federal Government through the CBN on the need to provide revolving housing fund and inject a minimum of N500 billion loans as intervention funds into the real estate sector at a single digit to develop the housing sector.

“The workshop commends the recent FMBN review of the off-takers guarantee which makes it acceptable and bankable in favour of housing corporations to enable them access construction loans from commercial banks and calls on all state governments to support their housing corporations to take advantage of this opportunities for mass housing projects”, it stated.

The communiqué signed by AHCN’s President, Muhammed Baba Adamu and the Secretary; Olusola Martins, observed the lackadaisical attitude of governments to the National Housing Fund as opposed to what obtained when the policy was newly introduced and admonished that all outstanding contributions to the NHF should be remitted while the statutory provisions of the National Housing Policy should be strictly enforced and applied as well as the sanctions embedded in the policy.

The workshop noted that some state governments have pulled out of the National Housing Fund which will rob civil servants in such states of the inherent benefits of accessing mortgage loans through NHF. “In view of the propose housing development programme to be embarked upon by the Association in all the states of the federation, the workshop call on all states that have pulled out of the funds to return to provide opportunities for civil servants in such states to benefit from the funds”, it said.

On governments’ plans to construct over 17,000 housing units in each of the 36 states and the FCT under the National Housing Programme, AHCN urged the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola to make use of state housing agencies in execution of the projects as well as adoption of local building materials and more efficient NBRRI building technologies to bring down the pricing of the housing units for the people.

Speaking on the Nigerian property market, the association described it as huge with the capacity to contribute about 15per cent to the Gross Domestic Product (GDP) and employ five to seven million people with its multiplier effects if well harnessed. The gathering, which was also the 97th Council Meeting/44th Annual General Meeting of AHCN further resolved to kick-start the retraining of housing personnel especially professionals that supervises projects on sites to drive production of quality housing and the daunting task of mitigating housing shortage in the country.